Profits up for IT Companies

Logica almost doubles profit for most recent half-year while CSC sees net income grow 5.5% despite revenue dip

Two IT services companies reported growing profits last week, providing some much-needed good news for the IT sector.

European IT services and BPO firm Logica grew pre-tax profits to £24 million for the second half of its financial year, up from £12 million for the same period last year. The company reported revenue growth of 6% (after correcting for the number of working days) to £1.87 billion, driven in the main by a 10% boost in outsourcing revenues.

At the same time, Logica cut the total number of subcontractors it employs by 20%. Beyond the 1,900 redundancies it has already declared, Logica said there would be no more job cuts for internal staff.

Meanwhile, US IT services and outsourcing company CSC managed to grow net income by 5.6% to $131 million for its most recent financial quarter, despite a decline in revenues of 12% to $3.9 billion.

CSC’s commercial outsourcing division and managed services arm each saw revenue fall steeply: by 22% to $840 million and by 17.6% to $1.56 billion respectively. These were tempered, however, by a 1.7% revenue increase for the North American public sector division to $1.52 billion.

The company also announced its intention to acquire the Brazilian division of bankrupt US management and technology consultancy BearingPoint. CSC described Brazil as South America’s “largest, most important and growing market”.